AOL, Google exploit programmatic

10 February 2014

NEW YORK: Online media firm AOL and internet giant Google are both taking steps to exploit the growing trend to programmatic advertising but in different ways, as one looks to content delivery and the other to target brand advertisers.

"AOL network has gone from a standing start just over a year ago to building a programmatic business with revenue well north of $200m in 2013 and we have a clear path for rapid growth in 2014," said CEO Timothy Armstrong in a conference call reported by Seeking Alpha.

He said the company had served a total of 4.3bn video ads in December alone and added, for context, "In Q4, 2013 we had more revenue than we had in the entire year in 2012".

This performance had been driven by the acquisition of Adap.tv, the video advertising platform, and he expected that another recent acquisition – content personalisation startup Gravity – would have a similarly dramatic effect.

He explained that he saw Gravity as the next "graph" on the internet, after search and social. The "personalisation graph" it offered was, he said, "a very, very accurate way to understand the data of consumers in terms of what they are actually personally interested in".

The best way to think of it, he suggested, was that "Gravity allows programmatic delivery of content at scale".

"We have been jawing about it for years," he added, "that advertisers had tons of machines and editors didn't. Gravity helps in that".

Google meanwhile is seeking to attract brand advertisers into the world of programmatic which is currently dominated by direct response advertisers.

It is taking the programmatic concept of private publisher exchanges and turning it on its head with "custom brand exchanges". Where the former start with particular publishers, Google's reverse-engineered version starts with demand and seeks to match large brand ad budgets to premium inventory. "We're trying to create effectively a curated network for these advertisers using the best inventory these publishers have to offer," Aaron McNally, market development manager at Google-owned DoubleClick Ad Exchange, told Advertising Age.

Automakers Cadillac and GM are among the brands that have trialled this approach. And while there was a danger of publishers simply cannibalizing spend that would otherwise have gone through a direct sales team, observers thought that GM's involvement could mark a tipping point.